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Canadian private airline company Transat's planeis pictured after arriving at Toussaint Louverture airport in Port-au-Prince Jan. 23.

© Swoan Parker / Reuters/REUTERS

Transat A.T. Inc. is holding its own against heightened competition and added capacity from aggressive rivals, says the head of the tour package operator.

"Everybody was saying, 'those guys are adding capacity like crazy and Transat will suffer,'" said Transat president and chief executive officer Jean-Marc Eustache Thursday after the company posted third-quarter earnings.

Montreal-based Transat – Canada's largest tour operator – faces growing pressure from Air Canada's low-cost carrier Rouge as well as other players, including Sunwing Travel Group Inc.

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Transat is managing to hold prices steady on key destinations in France and flights to London, but the Dublin route is experiencing lower pricing, Mr. Eustache said on a conference call for analysts.

The company posted earnings of $25.8-million or 66 cents per share in the third quarter, compared with $41.1-million or $1.07 per share in the year-earlier period.

Adjusted net profit before non-operating items was $26.7-million or 69 cents per share, compared with $30.8-million or 80 cents.

Revenue was $941.7-million, compared with $927-million a year earlier.

Analysts had forecast EPS of 67 cents and revenue of $966-million.

Transat said it was hurt by a 10-per-cent hike in industry capacity on the transatlantic market as well as the impact of fuel-hedging accounting in 2013.

"In the entire history of the company, we've done better on only two occasions, including last year, which was a record," Mr. Eustache said.

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"So we're talking about a very satisfying start to the season."

Transat is confident it can fend off the increased competition thanks to cost-cutting, enhanced fleet flexibility and a new marketing campaign coming out soon, he said.

"Forget about the rest [of the players]. They do what they have to do and we do what we have to do," he said.

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